Auto components sector recorded 1 lakh temporary job cuts from Oct 2018-July 2019
As per the Auto Components Manufacturers Association (ACMA), close to one lakh temporary workers in the auto components sector lost their jobs between October 2018 and July 2019 due to the slump in the auto industry.
Auto component sales in the first half of the year declined by 10% to Rs1.79 lakh crore, while exports and the aftermarket segment grew, the industry body added.
ACMA President Deepak Jain stated, “Primarily, it is the temporary employees who have lost jobs. It was due to component makers adjusting production to demand.”
He added that the automotive industry is facing a prolonged slowdown, with vehicle sales in all segments continuing to plummet for the last year. Considering that the auto component industry grows on the back of the vehicle industry, a current 15%-20% cut in vehicle production has inter-alia adversely impacted the auto components industry performance and investments.
This slump in the auto industry has also impacted the performance of the auto components industry as well, resulting in lower sales.
The second-half of 2018-19 saw a significant slump in vehicles sales that continued well into the first half of 2019-20. Consequently, the component industry, in tandem, posted a some-what subdued performance.
A subdued vehicle demand, recent investments made on the transition from BS-IV to BS-VI, the liquidity crunch, a lack of clarity on the electric vehicles policy, lack of a uniform GST rate among others, have adversely impacted the expansion plans of the component sector. For the industry to pick up and to arrest further job losses, government intervention for a sustainable long-term growth of the industry is a must.